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What is Reef Crypto? How does REEF governance work?

Introduction

The Reef Crypto is a Substrate-based, layer 1 blockchain founded in 2019 by Denko Mancheski. In November 2021, the project rebranded from Reef Finance to empower its development from a Decentralized Finance (DeFi) platform to a completely operating blockchain.

Like other networks, Reef Crypto offers use cases for NFTs, DeFi, innovative contract development, and GameFi. The Reef Crypto also provides liquidity bridges to move ERC-20 tokens between Reef and Ethereum and BEP-20 tokens between Reef Crypto and the BNB Chain.

What is Reef Crypto?

The REEF token is Reef’s native cryptocurrency. It can pay transaction payments on the network using its gas method and on-chain governance. It contains both the NPoS and PoC consensus mechanisms.
REEF was initially minted as an ERC-20 token on Ethereum and BEP-20 on BNB Smart Chain. However, you can directly convert it to 1:1 on Reef Crypto.

Reef (REEF) Live Price, Market Cap, Volume, Supply.

The Reef blockchain

The Reef Crypto was developed using Parity’s Substrate software development kit. This aspect makes it interoperable with Polkadot parachains and part of a more extensive Web3 network of chains. The Reef is Ethereum Virtual Machine (EVM) compatible, making it easy to port EVM Decentralized Applications (DApps) and build on, especially for users experienced with Solidity (Ethereum’s primary coding language).

The blockchain uses an NPoS consensus mechanism for block production and Proof of Commitment (PoC) for electing members to a Technical Council. Reef Crypto burns all network fees (including smart contracts), and Validators are paid from a fixed rewards pool. This terminates any economic motivation to create weak contracts with high prices, which can cause congestion on a network.

How Reef governance works

Compared to Ethereum (ETH)and Bitcoin (BTC), Reef has executed a governance model that delivers direct methods for upgradeability. Ethereumand Bitcoin Ethereum depend on their Proof of Work (PoW) miners to choose which upgrades to receive. This process leads to stagnation and hesitation to enhance scalability, harming mining profits.
Reef allows two groups to perform together to execute network changes: a Technical Council and Validators.

The Technical Council

The Technical Council approves and reviews network updates. These members are selected via the PoC consensus mechanism. PoC has similarities with Trusted Proof of Stake but includes a long bonding period of at least a year. Anyone who stakes Reef Crypto to nominate a Technical Council member is incentivized to vote for competent members with longevity.

Technical Council members make decisions on block size, time, throughput, and other technical parameters. Making these modifications on-chain is potential through a majority of approval from the Technical Council.

Validators

Validators process blocks of fair transactions and operate a node. These are selected using the NPoS consensus instrument. As previously stated, all transaction fees are burned on the Reef Crypto. It means that validators are paid rewards from a yearly inflation pool (roughly 8%).

Validators are chosen by nominators, which we’ll examine briefly. If a validator acts cruelly or misbehaves, they will hold their stake slashed.

Staking on Reef

Both nominators and validators in NPoS must stake REEF to take part. By staking REEF, nominators earn more REEF by choosing good validator prospects. The nominator can transfer their rewards if the validator is selected into the operational stage and successfully processes blocks. If the validator misbehaves, the nominator will lose some of their stakes, and the validator will be slashed.

Staked REEF is locked until the nominator determines to release their validator nomination, which becomes useful in the next era (roughly 24 hours). The nominator must then wait 28 days for their stake to be replaced.

Active validator set and rewards

Not every selected validator will make it into the active set of validators. In most possibilities, an algorithm will only allow you to actively support one successful validator Perera. It is the case even if you staked behind multiple ones chosen for the active set.

Each validator can only keep payouts to 64 nominators. If a validator has more nominators than this, they are oversubscribed. Only the top 64 nominators, by the amount staked, will receive bonuses.

Even if they don’t accept rewards, the other nominators’ stakes will still depend on towards the whole staked behind a validator. The set of validators is calculated off-chain, with some nominators destroyed according to the size of their stake.

The Reef ecosystem

The Reef isn’t only made up of its blockchain. It has an ecosystem of devices and services that complete its layer 1 network.

Reef Web Wallet

Reef Web Wallet is a crypto wallet, Decentralized Exchange (DEX), and token developer on Reef. You can switch, send, and collect tokens here, much like on ReefSwap. You’ll require to download and install the Reef Browser Extension to operate the app.

Conclusion

For many, Reef is still well-known for its original DeFi business model. However, Reef has made significant changes and grown into a more developed ecosystem and fully functioning blockchain. The blockchain’s new developments are still young, giving it great potential for growth in the number of smart contracts and Decentralized Applications (DApps) deployed on the network.

FAQ

  1. When did Reef Coin start?

    Reef Finance was launched in 2019 by Denko Mancheski, who has a powerful background in crypto.

  2. What is special about reef coins?

    It is fast, scalable, has low marketing costs, and does no extravagant mining. It is created with a Substrate Framework and comes with on-chain governance.

  3. How many reef coins are there?

    The REEF tokens have been originally deployed on Binance Smart Chain and Ethereum. The total collection of REEF tokens is 18,454,547,076 REEF.

  4. Is Reef crypto a good investment?

    It cannot be deemed a profitable asset for five years. It is a good buy possibility at the current price, but only for the medium-term. Long-term valuation is ineffective, so take valid financial advice before investing if you want to add REEF to your present investment portfolio.

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